*originally posted by CHOW YUET NGOR
According to the analysis and conclusion under R360 of Opinions of the ICC Banking Commission 1998-1999(ICC Pub. No. 613), Sub-Art. 35(b) applies to the said query. However, I do not understand why Art.36 of UCP500 has not been considered by ICC to apply to the said query.
Please let me have your comments.
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PGauntlett
- Posts: 153
- Joined: Fri Apr 05, 2019 5:25 pm
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I agree with you that Art 36 should have applies to this query. If the ICC had studied 'UCP 1974/1983 revisions explained' (publ 411-page 63) in relation to the then Art 39 they would arrived at a decision to that stated in R360
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From our experience as an LC consultant firm, those ICC opinions involving transport or insurance may not be reflecting the ever changing practices of transport and insurance because the bankers who give these opinions may not be updated with the changing practices in these highly technical trades.
I had dealt with import and export of steel products, such as I beams, angles, joints and so on. I knew from the insurance people that because they could not put the insurance premium too high due to the fact that the steel goods were not expensive cargoes. So in order to stay competitive, they tried to limit their liabilities for those standard perils, such as rusting, during the sea voyage which was very common according to the statistics.
Because steel goods were not high value goods, they did not deserve sophisticated packing to ensure that they would not contact the hot and damp air in the high sea or kept away from the burning sun and heavy rains during the rough sea voyage. So oxidation in the form of rust was a natural consequence. It all depended on how serious the rusting was. The buyer in the trade was well aware and prepared for such minor rusting.
The trade-off was that a lower premium would be applied but with those frequent perils of the sea excluded, such as rusting and minor scratches (for those steel goods, such as round bars used to build condominiums). Nearly all round bars are coated with rust and this is normal I would say. They are not made of stainless steel.
In the days of UCP 290 or UCP 400, I did not have cargo policies rejected just due to such standard exclusions. After the introduction of UCP 500, bankers began rejecting documents relying on these standard exlusions and disturbed the rule of the game in steel trade.
Bear in mind that "all risks" is a trade name only to indicate its wider coverage. It does not mean to cover all kinds of risks.
I do encourage the ICC Banking Commission to refer to ICC Insurance Commission and seek their opinions before they determine discrepancies in this sort of queries involving the practices of other trades.
This ICC opinion seems to have neglected article 36 of UCP 500, that is specifically provided for such situation.
Mr. PGauntlett has already given very good reasons for not deeming such standard exclusions as discrepancies. I do not wish to reiterate them here.
I am from www.tolee.com
[edited 11/22/01 10:03:39 PM]
I had dealt with import and export of steel products, such as I beams, angles, joints and so on. I knew from the insurance people that because they could not put the insurance premium too high due to the fact that the steel goods were not expensive cargoes. So in order to stay competitive, they tried to limit their liabilities for those standard perils, such as rusting, during the sea voyage which was very common according to the statistics.
Because steel goods were not high value goods, they did not deserve sophisticated packing to ensure that they would not contact the hot and damp air in the high sea or kept away from the burning sun and heavy rains during the rough sea voyage. So oxidation in the form of rust was a natural consequence. It all depended on how serious the rusting was. The buyer in the trade was well aware and prepared for such minor rusting.
The trade-off was that a lower premium would be applied but with those frequent perils of the sea excluded, such as rusting and minor scratches (for those steel goods, such as round bars used to build condominiums). Nearly all round bars are coated with rust and this is normal I would say. They are not made of stainless steel.
In the days of UCP 290 or UCP 400, I did not have cargo policies rejected just due to such standard exclusions. After the introduction of UCP 500, bankers began rejecting documents relying on these standard exlusions and disturbed the rule of the game in steel trade.
Bear in mind that "all risks" is a trade name only to indicate its wider coverage. It does not mean to cover all kinds of risks.
I do encourage the ICC Banking Commission to refer to ICC Insurance Commission and seek their opinions before they determine discrepancies in this sort of queries involving the practices of other trades.
This ICC opinion seems to have neglected article 36 of UCP 500, that is specifically provided for such situation.
Mr. PGauntlett has already given very good reasons for not deeming such standard exclusions as discrepancies. I do not wish to reiterate them here.
I am from www.tolee.com
[edited 11/22/01 10:03:39 PM]